Ukrainian Government Joins Forces with BlackRock and JPMorgan

According to a report by The Financial Times, financial titans BlackRock and JPMorgan Chase revealed plans to assist the Ukrainian government in setting up a reconstruction bank.

This bank, the Ukraine Development Fund, has the goal of attracting private investments to rebuild the country after Russia’s invasion devastated it.

Building Ukraine 2.0 https://t.co/8CwhmfVk6w

— The Economist (@TheEconomist) June 28, 2023

Philipp Hildebrand, BlackRock’s vice chairman, announced the financial giant’s plan to deploy large amounts of capital to draw in anywhere between a five-fold and ten-fold increase in private investment.

The investments will mostly focus on agriculture, climate, and infrastructure.

According to joint estimates from the Ukrainian government, the World Bank Group, the European Commission, and the United Nations, $411 billion is needed to rebuild the nation.

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The estimate spans the one-year timeframe from Russia’s military incursion into Ukraine on February 24, 2022 to the one-year anniversary of the war on February 24, 2023.

The report added that construction and recovery costs will span over 10 years. Such efforts necessitate both private and public funds.

Per the Financial Times report, the Development Fund is trying to acquire low-cost loans from several charities, governments, and international non-profit organizations.

The Ukrainian government reached out to BlackRock’s consulting division back in November to find ways to attract the capital needed to rebuild the war-torn country. In February, the Ukrainian government reached out to JPMorgan, as well.

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In a similar vein, Ukrainian President Volodymyr Zelensky announced in June that the Ukrainian state was working with the two financial titans and consultants at McKinsey.

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— Ron Paul (@RonPaul) June 28, 2023

For its part, JPMorgan assisted the Ukrainian state in raising over $25 billion in sovereign debt over the last 15 years. In addition, it spearheaded Ukraine’s $20 billion in debt restructuring that took place during 2022.

One of the main issues the Ukrainian state found in trying to attract investments is many investors have been hesitant to pony up funds. This is due to the country’s corruption, lack of transparent governance, and underdeveloped capital markets.

These are issues that plagued Ukraine prior to Russia’s military interventions in 2014 and 2022.

This article appeared in TheDailyBeat and has been published here with permission.